Section 106 Contributions Scrapped

The government has announced that councils in England will no longer be applying Section 106 charges on smaller residential building schemes. Charges would be scrapped that require a large payment and add considerable costs for developers seeking to build a small number of properties or individuals whobuild their own home It will now be cheaper and easier to build new properties or bring disused buildings back into use.

In support, it has been said  that a number of building projects have been made unviable by councils applying exorbitant  charges, such as a £32,000 charge that was required to build a self-build three-bedroom house in the New Forest, and a £20,000 charge to build two modest houses in Andover.

These proposals follow on from changes to the Community Infrastructure Levy that exempt self-builders and householders building extensions and family annexes from paying for building over a certain size. Previously, in some parts of London charges of £43,700 for an average sized self-build house were being imposed.

The proposed changes to Section 106 bring the charging into line with the infrastructure levy. It also supports changes which mean from April 2015 there will no longer be a council tax surcharge on family annexes.

Developers of smaller housing schemes of 10 homes or fewer and those bringing disused buildings back into use will also be exempt from affordable housing levies.

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